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Lender: Bankrupt Suniva has no chance of restructuring

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Essential Energy Insights - January 2021


Lender: Bankrupt Suniva has no chance of restructuring

The U.S. solar manufacturer whose 2017 bankruptcy led to the tariffs imposed by President Donald Trump on imported solar power equipment earlier this year is stuck in insolvency with no way no restructure its business, one of the company's lenders said in a March 23 court filing.

Georgia-based Suniva Inc. "has no reasonable possibility of a successful reorganization within a reasonable time period," SQN Asset Servicing LLC told the U.S. Bankruptcy Court for the District of Delaware. The lender said it will not support "any plan of reorganization due, in part, to the costs associated with confirming a plan." Without SQN Asset Servicing's backing, "no plan can be confirmed in this case," the filing added.

As of mid-February, SQN and affiliated lenders were owed approximately $58.7 million in principal and accrued interest plus fees and other expenses, the company said. Suniva estimated at the time of its April 2017 Chapter 11 filing that it had up to $50 million in assets and between $100 million and $500 million in liabilities.

Matt Card, a Suniva executive and the company's lead campaigner for tariffs on foreign-made solar cells and panels, did not immediately respond to a message seeking comment March 23. A lawyer for Suniva also did not immediately respond to a request for comment.

Weeks after it filed for bankruptcy, Suniva asked the U.S. government to impose tariffs and price controls on imported solar cells and panels made from crystalline silicon. Rather than target specific exporting countries accused of unfair trade practices, Suniva sought global trade restrictions, saying domestic manufacturers simply could not compete with foreign companies.

The Oregon-based solar manufacturer Solarworld Americas Inc. joined Suniva's case as a co-petitioner in May 2017 after its corporate parent, SolarWorld AG, filed for insolvency. The penalties that Trump approved in January did not go as far as Suniva and SolarWorld Americas had hoped. Still, Suniva at the time said they were a "step forward for this high-tech solar manufacturing industry we pioneered right here in America."

However, most in the industry say the tariffs are unlikely to drive much new American solar manufacturing. The Solar Energy Industries Association, a trade group that fought the import taxes, estimated that the new duties will cost the U.S. more than 20,000 jobs in 2018.

While Suniva framed its case as a battle to save what was left of the U.S. solar panel manufacturing industry, critics questioned the motives of SQN, the financier driving the case. SQN offered Suniva $4 million in debtor-in-possession financing on the condition that Suniva pursue a trade case.

Shortly after Suniva filed its petition with the U.S. International Trade Commission, SQN told a group representing Chinese manufacturers and trading companies that it could force Suniva into liquidation and end the trade case if the group bought approximately $55 million worth of equipment that Suniva put up as collateral.